Recent reality TV shows, such as Pawn Stars on the History Channel and Hardcore Pawn on truTV, have brought quite a bit of attention to the pawn industry.  While the television attention may be new, the industry certainly is not.  In fact, the history of pawn shops dates back more than 3,000 years.  As far as historians can tell, the first pawn shop was in China but pawning quickly spread to many other parts of the world including the newly founded United States.  As the country grew pawn brokers and pawn shops moved west and today they are found in every major city.

The sudden need for cash in exchange for goods is not only an issue in the United States.  

Pawn shops span the globe as they are found in many different countries throughout the world.  Customers come from every walk of life, from the hard working family to the affluent.  The common need is usually quick cash for an unexpected expense.  Selling something or getting a loan at a Phoenix pawn shop can solve the problem of the need for cash rapidly.  

According to the 2010 United States Economic Census, there were approximately 8600 pawn shops in the U.S but it is suspected that by now there are likely over 12,000 pawning establishments.  The National Pawn Brokers Association points out that a little over 80% of pawn stores are independently owned small businesses or are part of small regional chains.  A few large pawn store chains, such as Pawn America, have also popped up in the U.S.

The pawn shops of today operate as a kind of bank for millions of Americans by providing quick cash through loans.  They help people meet daily financial needs in a way that no other institution can by providing short term, collateral based loans that will have no effect on the person’s credit history.  In fact, the pawn broker does not usually care what a person’s credit score is because they have physical collateral, in their hands, which will cover the loan if it is not repaid.  Curiously, pawn customers tend to be better disciplined in their borrowing habits than the average American.  They only borrow what they need and are much more likely to repay their loans to redeem their collateral item.  It has been estimated by the FDIC that about 7.4 percent of all U.S. households have used pawn shops.

America’s pawn shops deal with a huge variety of items including antiques, jewelry, guns, and electronics.  Each pawn shop can have a slightly different selection.  Some, like the Phoenix pawn shop Arizona Jewelry and Loan in Scottsdale, do not deal in tools while other shops will.  Some shops will choose to only deal in certain brands of any given item.  If you are looking to pawn a specific article to save time consider doing some investigating online to find out which pawn shops in your area may take your item.  If you cannot access a computer very easily then consider calling each shop.  That will stop you from wasting gas and time to make trips to pawn shops that do not carry your type of piece and therefore will not give you a loan on it or purchase it from you.

What Happens When You Pawn An Item?

By now you may be asking what exactly does pawning mean.  What happens when you pawn an item?  To pawn a piece it means that you give the pawn shop your item in exchange for a cash loan.  As an example, in the winter you might give the pawn shop your unused bicycle as collateral for an $80 loan.  If you repay the loan by a given date, usually 90 to 120 days after you pawn the item, you will receive your bike in return.  The loan repayment amount will include interest and pawn fees.  These are carefully regulated by the town, state, and national laws.   

If you do not manage to pay the loan off on time, the pawn shop takes ownership of the bike and has the right to sell it.  Some pawn shops will immediately put the item up for sale to pay back your loan but many will renegotiate the loan, extending it for extra time until you can pay back the loan.  Of course this will cost you more money, but if you really want or need the item you pawned returned it will be well worth the cost.  

Interest rates can range from 3 to 25 percent, depending on where the shop is located.  There is also a storage charge which can be as little as $1 per month, depending on the size of the item.  

As far as how much money you will likely get on an item, a good estimate is around 60% of what you originally paid for the article.  One of the reasons why a pawn broker does not what to give an excessive amount of money in return for any piece is that they really do want you to come back and get your item.  If you received too much money for the article you would be much less likely to return to pay off the loan and take the item back.

The majority of pawned items, around 70-80%, are reclaimed by their owners.  According to the National Pawnbrokers Association’s 2010 Trend Survey the average pawn loan is $100.  Pawn shop loans are rarely, if ever, for large amounts unless the item is very large such as an antique car that is truly worth a lot of money.  Pawn shops also purchase items outright to sell.

When you go to pawn an item be ready to produce proof of identity.  Usually a driver’s license will do, or some other form of official paperwork such as a passport.  Depending on where you are located you may also be fingerprinted.  Various methods are used to stop thieves from selling items to pawn brokers and sending fingerprint copies to law enforcement to check against known criminals is one way.  Other jurisdictions may use lists of what a pawn shop has taken in each day to compare against lists of known stolen goods.

Once everything is done, which only takes a matter of minutes, you will receive your money and be on your way.  It’s just that simple.

Remember that when you choose to pawn something you do risk either losing the item if you cannot pay back the loan or extending the loan and paying tremendous fees over time to the point where you may have been better if you had never considered pawning an item in the first place.  So choose items to pawn carefully.  You do not want to be devastated by losing an item if you cannot repay the loan.  Be very careful with the decision to pawn something it a high level of sentimental value because you could end up regretting it deeply.

Another side of Phoenix pawn shops

In recent years pawn shops have been given a makeover and have become respectable establishments. They are no longer considered a haven for only thieves and drug dealers trying to get rid of their most recent find in order to get quick cash.  In fact, it is seriously frowned upon for pawn brokers to take in any stolen or otherwise ill-gotten items and all brokers work hard to avoid this situation.  Pawn shops are now found in upscale neighborhoods such as Scottsdale.  They are clean, brightly lit stores.  No more dust and grime to contend with.   And pawn brokers are college educated people, running a very serious business.  They are routinely quite knowledgeable about all of the types of items they choose to have in their stores.

Pawn brokers have also opened up shop on the internet.  With names like UltraPawn.com, Pawngo.com, and iPawn.com they have set up web sites for individuals to go to and pawn items without ever needing to go to a store.  Once a price is agreed upon over the internet the item is shipped to the pawn broker.  After it is received and accepted he puts a check in the mail.  It usually does not take very long to determine if your item is the real thing and worth the agreed upon price.  A check usually goes out within 24 hours.  Rather quick and simple, and very private.  You can check out Arizona Jewelry and Loan’s web site for this type of service.  This can be a very convenient way to get extra cash if you do not want to or cannot go to a pawn shop but you must have the time it will take to actually end up with money in hand.  Online pawn brokers are excellent sources for larger loan amounts like a few thousand dollars.  

Now you know a little more about what is involved in pawning an item.  You may be mentally taking stock of what you could pawn, or even sell outright to a pawn shop, in order to get extra money.  Choose wisely, then come to Arizona Jewelry and Loan in Scottsdale.  You will be glad you did.  Our personal service is second to none.